Falconbridge is a 49% joint-venture partner in the development of the massive Koniambo orebody in New Caledonia. SMSP, the development arm of the North Province of New Caledonia, is the 51% partner.
Koniambo is a world-class resource. Nickel is contained in both saprolite and limonite with grades that compare favourably with other laterite deposits in the world. The saprolite orebody contains 142.1 million tonnes of measured and indicated resources grading 2.13% nickel and 156.0 million tonnes of inferred resources grading 2.2% nickel (see Reserves and Resources for details).
Nickel would be extracted using a smelting process to produce ferronickel, utilizing an updated version of the process used at our Falcondo operations, called nickel smelting technology (NST). Initially, nickel will be extracted from the saprolite part of the orebody. In future expansions, there are plans to extract nickel from the limonite orebody, an undiluted inferred resource of 100 million tonnes of 1.6% nickel, using a hydrometallurgical process.
In 2004, Falconbridge completed a bankable feasibility study (BFS) on the development and processing of the laterite resource. The BFS has increased the level of project definition with the level of engineering now at approximately 25%. Annual production would be 60,000 tonnes of nickel in ferronickel, at an estimated cash cost of $1.65 per pound, positioning this operation as one of the largest nickel producers in the world. The cost of inputs has increased as a result of changes in foreign currency exchange rates as well as increased service and raw materials costs.
The capital cost of Koniambo is estimated to be $2.2 billion as of September 2004, which includes the construction of a 390 megawatt power facility to supply the electrical load, a metallurgical plant, mine development and other infrastructure such as the port and road facilities, and owners' costs.
Additional costs of interest during construction, working capital, financing charges and allowances for Forex and escalation add a further $500 million to the capital cost. Development of the limonite resource, which is deferred for future years, is also sufficient to support a 60,000 tonne-per-year operation, providing a future opportunity to further increase the nickel production base.
With the completion of the BFS, we are focused on finalizing the financing structure and continue to hold discussions with our partner and the French government to determine their level of financial support.
Falconbridge continues to incorporate its core values towards sustainable development in the Koniambo project development and planning. In May 2005, Falconbridge completed the Koniambo Project Environmental and Social Impact Assessment (ESIA) – Projet Koniambo Étude d'impact environnemental et social, which is a process to identify, predict, evaluate and mitigate environmental, social, economic and other relevant impacts associated with the project. Preparation and submission of the ESIA is required for project scope definition, financial institution review, as well as project permitting.
Thanks to a successful development track record, we are confident in Koniambo's project management team and its ability to execute this project. The implementation approach continues to be assessed, with the earliest possible start-up in 2009.
Koniambo's scope and significance to Falconbridge's future can be illustrated by comparing it to the Sudbury Basin – one of the world's most prolific sources of nickel. For more than 75 years, Falconbridge has mined over 140 million tonnes of ore at an average grade of 1.5% nickel in Sudbury. Consequently, based on its even larger reserves and resources at over 2% nickel, Koniambo has the potential to contribute to Falconbridge's future what Sudbury has contributed to its past, and will add significant value for decades to come.
For more information, please contact
projectsengineering@falconbridge.com. |
